Easy Subject-To Transactions

The old Emily Morgan Hotel was sold to Doubletree/Hilton last week — and not much has changed.

No big remodel, you can still bring your pet, you can still get an Alamo view. But as of 12-12-12, you now get the famous Doubletree Hotel cookie at check-in, too. A sweet touch.

That’s proof that real estate transactions in San Antonio don’t have to be upsetting and tumultuous. Sometimes a property quietly changes hands and hardly anyone notices. For whatever reason, the ownership of Emily Morgan changed and life goes on. People check in and check out. The hotel still makes a great place to stay for a downtown Riverwalk atmosphere.

The recent news of the hotel sale makes me think of a typical subject-to sale, where the owner simply wants out of the stress of the payments on their underwater mortgage.

These subject-to transactions are just about the simplest, creative way to sell your house when you need to sell it fast and without a lot of ballyhoo.

  • The bank is happy because they get their money; payments are caught up and made regularly.
  • Since local home values are affected by foreclosures, the neighbors are happy because they don’t have to live next door to a foreclosure sign in the yard.
  • The buyer is happy because he has the opportunity to buy quickly.
  • And of course the seller is happy because there’s no intense waiting period as in a short sale, nor the hassle of renting. In the typical scenario, everyone wins.

But that doesn’t mean that nothing will change after a subject-to sale.

While the subject-to transaction is easy, fast and beneficial to all parties, the downside is that a move is inevitable.

In Texas, unlike in many other states, the seller of the house may not then turn around and rent the house from the new owner. The original owners must vacate the property by law. That means moving out.

In many cases in a subject-to transaction the buyer “catches the homeowner up” on late payments. If the seller is behind on monthly payments (and getting warning shots from the lender) the investor in the property will patch the relationship with one check. From then on, regular payments to the mortgage company prevent further action from the bank and put the original owner back in “good graces.” In some cases, their credit score even improves as a result of the subject to deal.

However the buyer/investor can only do so much (legally) in a subject to relationship. He can’t become the landlord to the person he bought the property from. It just doesn’t work; even if both parties agreed the the arrangement, they would be inviting a lawsuit from the State of Texas.

The upside is that the seller of the house can now relocate into a living situation they can afford. That could mean a move to a more affordable state or neighborhood. The downside is that the seller would probably not be able to buy another house for a year or two, due to the recent transfer of property in a subject to sale.

More on that in another post, as well as tips for ensuring that your buyer/investor can make the payments. (You put yourself at great risk if you sell subject to to a one-time buyer who’s only doing a subject to because he can’t afford a conventional mortgage. There are ways to find this out.)

Markette Properties is committed to a smooth, no drama, no stress subject-to transaction.

I can’t guarantee “cookies at check-in” like the newly named Emily Morgan Doubletree. But if an easy transfer of property — and no more mortgage payments — seems interesting to you, I’d enjoy talking with you about the process.

We can buy your house fast in Texas! Markette Properties presents an unique, simple approach for selling your home! We are real estate investors. We buy houses in Texas just like yours! We are dedicated to the highest professional real estate standards for all of our clients.

Do you want to sell your house fast in Texas for top dollar with the least hassle? Give us a call! (210) 853-2788 or click the button below.

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Photo Credit Flickr CC: Scutter

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